12. Which one of the following statements related to annunities and perpetuities is correcet a) Most loans are a form of a perpetuity b) An ordinary annuity is worth more than an annuity due given equal annual cash fl 10 years at 7 percent interest, compounded annually. c) Perpetuities are finite but annuities are not. d) A perpetuities composed of $100 monthly payments is worth more than an an $100 monthly payments given equal rates of return 13. Tony deposited $5000 this morning into an account that pays 5 percent interest, corm annually. At the same time, Morgan also deposited $5,000 this morning into an acc pays 5 percent interest compounded annualy. Tony will withdraw his interest ear spend it as soon as possible when they are available. Morgan will reinvest he earnings into her account. Given this, which one of the following statement is true? a) Tony will earn more interest the first year than Morgan will. b) After five years, Tony and Morgan will both have earned the same amount of i Morgan will earn more interest the second year than Tony. d) Tony will earn compound interest. Michael invested $1,000 ten years ago and expected to have $2,000 today. He ha or withdrawn any money from this account since his initial investment. All reinvested in the account. As it turns out, he only has $1,700 in his account to one of the following must be true? a) He earned simple interest rather than compounded interest. b) He earned a lower interest rate than he expectecd. c) He did not earn any interest on interest as he expected. d) The future value interest factor turned out to be higher than he expected. 4. Which one of the following compounding periods will yield the lowest effecti (EAR) given a stated future value at year 5 and an annual percentage rate percent? a) Semiannual b) Quarterly ) Monthly Continuous